UPDATE 1-European banks settle Madoff cases, Swiss hold out

* Alliance of firms says arranges settlements

* US trustee has recovered $1.5 billion (Adds HSBC unaware of settlement, comments from Swiss lawyer)

NEW YORK, May 25 (Reuters) - Some 20 European banks agreed to reimburse non-U.S. investors for $15.5 billion of losses from convicted swindler Bernard Madoff’s Ponzi scheme, but some Swiss lenders remain holdouts, a lawyer for victims said.

Javier Cremades, who helped create a legal network to pursue Madoff investor claims, told reporters in New York on Tuesday he arrived at the $15.5 billion sum, covering 720,000 investors, based on a survey of law firms in the network.

He declined to identify most of the banks, or say how much each agreed to pay.

Cremades said HSBC Holdings Plc HSBA.L was among the settling banks. A source close to HSBC said that bank was not aware of any such settlement. HSBC declined to comment.

Spain's Banco Santander SA SAN.MC has said its clients may have lost 2.33 billion euros ($2.88 billion) with Madoff.

Cremades said lenders in France, Germany, Portugal, Spain and the United Kingdom are among the settling banks, while Swiss lenders have resisted in part because of secrecy laws.

“Many investors outside have nondeclared money,” said Cremades, president of the Madrid law firm Cremades & Calvo-Sotelo. “The Swiss system is the toughest one.”

Yet he said settling ought to be “not expensive at all” for lenders that might otherwise face a “huge reputational issue” by holding out, “at a time confidence is not in abundance.”

Differing disclosure rules may explain why some banks do not reveal payouts, as they might in the United States.

In an interview, Daniel Fischer, a Zurich-based lawyer representing some 100 Madoff victims in Switzerland, said he is “very close” to asking prosecutors in that country to pursue criminal charges against one bank and one asset manager.

“Banks and asset managers are hiding the facts,” he said. “In Switzerland, if you take money from clients, and you don’t watch in a proper way how the account is handled, it may be criminal.”

Fischer said he is pursuing victims’ claims against at least four banks and two asset managers, none publicly traded.

Cremades disclosed the $15.5 billion sum Monday in the New York Times, saying it covered about 80 percent of the clients represented by the network’s firms.

U.S. victims have been less successful recovering funds, in part because many invested directly with Madoff, or used smaller managers known as “feeder funds” to invest with him.

There were only about 4,900 active accounts with Madoff when the fraud was revealed on Dec. 11, 2008.

Cremades said some European banks may seek reimbursement through Irving Picard, the trustee liquidating Madoff’s firm.

Picard has recovered more than $1.5 billion, but through May 21 had already identified 2,085 other valid claims by Madoff victims, totaling $5.45 billion.

Madoff, 72, is serving a 150-year sentence at a North Carolina federal prison. Five others have also faced criminal charges over what prosecutors call a $65 billion Ponzi scheme.

The U.S. case is In re: Bernard L. Madoff Investment Securities LLC, U.S. Bankruptcy Court, Southern District of New York, No. 08-1789. (1 euro = $1.234) (Reporting by Jonathan Stempel; Editing by Matthew Lewis and Steve Orlofsky)